Augmented and Virtual Reality Spending to Double in 2017

As virtual and augmented reality make their way into the mainstream market, a new spending analysis from International Data Corp (IDC) predicts worldwide revenues will double this year.

The research firm’s “Worldwide Semiannual Augmented and Virtual Reality Spending Guide” forecasts the AR/VR market to reach $13.9 billion in 2017 — up 130.5 percent from the $6.1 billion spent in 2016. Furthermore, AR/VR spending is expected to accelerate over the next several years, achieving a compound annual growth rate (CAGR) of 198 percent over the 2015-2020 forecast period and reaching $143.3 billion in 2020.

Most of the spending during the forecast period is expected to come from the consumer market, with early adopters expected to spend $6.2 billion this year (up 130.5 percent from 2016). Worldwide spending on VR hardware, software, consulting services and other systems is forecast to surpass AR systems spending this year and next year, “largely due to consumer update of games and paid content,” according to a news release. However, AR will leapfrog VR spending in 2018, “hitting stride in healthcare delivery, product design and management-related use cases.”

"On the virtual reality side, producers are quickly moving beyond games to create new content mainstream audiences will embrace,” said Tom Mainelli, IDC’s Devices & AR/VR program president, in a news release. “And on the augmented reality side of the fence we're seeing commercial entities begin to more seriously evaluate the technology and begin to test the waters of app development."

"We expect initial AR spending to lean on mobile workforce-based use cases, where AR headsets are a natural enhancement to existing mobility investments. And we will see education, research and design applications form a foundation of adoption in professional environments,” said Marcus Torchia, IDC research director, in a news release.

Geographically, the United States is expected to spend $4.3 billion on AR/VR in 2017. The Asia/Pacific region (excluding Japan) will deliver $2.6 billion, followed by Western Europe with $2.5 billion. The consumer market will be the largest segment of AR/VR spending for all three regions.